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Supervisor Fennel on Cannabis and the Economy

2nd District Supervisor, Estelle Fennel [Photo from her official website)

NOTE: This article was first published in the Independent.

With much of the marijuana farming community anxious and humming with concerns about Measure S and the changes to the cannabis economy, we met with Second District Supervisor Estelle Fennell.

Supervisor Fennel said, “on advice of counsel” she cannot discuss the particular issues of attorney Ed Denson’s recent concernsthat the Board of Supervisors expanded the scope of the Measure S tax, increased the amount of the tax, and changed who is being taxed when they converted Measure S into Ordinance without putting these important changes in front of the voters. Fennel said she cannot answer these questions because Mr. Denson has been clear he may file legal action on the matter. The Independent published a report on his letter and the County Counsel’s response in last week’s edition.

However, Supervisor Fennel did say she still supports the overall Measure S model of taxing the opportunity to cultivate rather than the dollar value of the product.

Fennel said, “The model that we chose is actually beneficial to the farmer. The farmer gets a certain amount of ground that’s permitted and it’s up to the farmer to maximize their product.” She said that a good farmer will have an advantage over a “sloppy farmer.” In essence, she pointed out, those farmers that don’t maximize their yield per square foot won’t be as successful as those that do.

The County is not as concerned with what you produce but how you do it. Fennel said, “It’s a land use regulation, so we are just regulating the impact on the land. If you say you want to grow on a thousand square feet, all we want to know is ‘Are you going to have the water for that? Are you in the right zone?’ and those sort of things.”

She pointed out, “The County is not involved in the product itself. I know people have said ‘what if I don’t grow this year, or what if I had a pest?’ Well, that was talked about earlier on; that becomes the bailiwick of the, let’s say for instance, the Agricultural Commissioner when it comes to product taxation, but land use taxation is for the right to grow on that land, and if you don’t grow on it, you shouldn’t be getting a permit on it.”

When asked about circumstances beyond the farmer’s control such as health issues, Supervisor Fennel said she will look into the specifics of a landowner resuming cultivation after taking a year off once land has been approved for permitting.

With regard to the changes legalization is bringing to the cannabis economy and therefore the overall economy, Supervisor Fennel’s primary message is one of patience backed up by overall optimism. While Fennel acknowledges the current drop in main street business, she thinks the economy will eventually even out.

I can’t say exactly why the drop [in business revenue] is happening but I think some of the reasons that those drops are happening are people are being more careful with their spending practices right now because of the uncertainty about their financial futures; they’re spending their money on setting up businesses; or they are affected by the drop in black market prices; or they can’t find market for their product. But a real take away from this is that it’s proof that the Cannabis industry plays a role in Humboldt’s economy. so where do we go…. I think we’ll see less lavish spending than we’ve seen in the past decade or so during the Boom. The lavish part of it probably will fade away, but I also think that there’s a great opportunity for things to settle into a more solid and sustainable economy as the regulated industry takes hold and people find their way.

She sees that the industry is now splitting into various niches. Fennel listed “nursery, cultivation, processing, manufacture, testing, transporting, distribution, dispensary, retail, associations, co-ops, and tourism.” Fennel said she thinks some people may no longer grow because they don’t want to contend with all the regulatory changes, but that these niches will provide them the opportunity to continue to earn a living.

Speaking specifically to the perceived “collapse of the marijuana economy” as pound prices sink to $500/lb, Fennel differentiated between the black market and the legal economy. She said,

I see more of a [price] collapse in the black market and a correction of the regulated industry which I believe could be beneficial for Humboldt since we are positioned both with name recognition and preparation for the change. There is a current slump, but if the industry stays the course, it could very well be folded into a sustainable part of our economy along with tourism, dairy, ranching, logging and fisheries, clean energy, etc.

…I believe the rocky start is due to the state’s decision to allow dispensaries to sell “product in stock” It’s become very clear that many dispensaries stocked up prior to the January roll out, so some permitted farmers are having to wait until those dispensaries run out before they can sell their permitted product.

Some farmers thought further ahead and had their markets lined up. And I hear that packaged products are flying off the shelves, so anyone that planned that far ahead is doing quite well right now. So it’s a correction time, and there’s another component obviously which is that it’s a big changing perspective.

And she emphasized the idea that she has faith in the creative nature of the local culture.

The entrepreneurial spirit is very much alive right now and I think we will see all manner of businesses pop up and along with that all manner of ways for people to make a good solid living either as employees or owners of those local businesses. So this is a moment of opportunity as I see it. It’s up to people who see cannabis as a valuable commodity, as something they support, to seize the day.

Fennel does understand that the transition is a stressful time, but said, “My hope is that our regulations and code enforcement will drive the ‘green-rushers’ off.”

She added, “It takes a substantial investment of energy, time and money to get involved in this industry…fly-by-night operations are not going to make the cut.
The proliferation of environmental degradation has got to stop. And the violence assiciated with criminal behavior will hopefully diminish, too.”

And Fennel thinks, as things smooth out and small farmers know what the economy and the regulatory framework will really be like, they will submit applications under the county’s new permitting program. Now that the environmental lawsuit has been settled, and the Planning Commission has nearly finished their work, Fennel expects the County’s new application process to be open by summer if all goes well.

For small farmers, Fennel sees a co-op model being a viable framework for their success. “Traditionally the agricultural model goes with the co-op in one way or another because no one can do it alone,” she explained.

Fennel emphasized the name recognition Humboldt has in the marijuana world and said that’s why Humboldt County is maintaining a separate “track and trace” system, so all pounds cultivated in Humboldt can be verified.

Furthermore, the Board of Supervisors is working to form a Cannabis Advisory Committee to give guidance to the Board on the issues that impact cannabis businesses. People who work in cannabis businesses will definitely be on that committee, she said.

89 comments

More “Smoke & Mirrors” from the same folks who gave us an unqualified Public Defender!!! Estelle “Getty” is just a source of BAD info as are the rest of the Board of “STUPIDvisors”!!! Remember in November throw ALL the bums out!!!

the algae is not from pot growers nutrients just flowing off the property.
There is a number of CSD, including Weott, Redway/Garberville etc. Who dump there waste into the river at the wrong times of the year, thus creating the algae blooms.
No pot grower ever has enough extra nutrients to let it leech off there property.

I’m just going to put this one out there to see what anybody else thinks about the cannabis collapse and the recent Bitcoin collapses as well as the collapse of the stock market. Many of us have been speculating that this is closely related to the fact that the marijuana industry is GONE. A lot of people that had previously invested in different areas with canna profits are pulling their money out because they can’t pay their bills.
Talked with a long-haul trucker today. She told me in previous years she ran soil loads between Humboldt and Mendocinino County non-stop 15 hours a day since 2010. This year she has yet to haul one load of soil she is trying to find other commodities to transport. Yet another person I know that owns a well-known garden supply store is actually thinking of closing their doors because there has been absolutely zero business the last month. In spite of being in business for many many years he just doesn’t see how he can sustain this much longer. I know of at least 15 houses that are going into foreclosure as the people are leaving the area because they cannot afford their payments anymore. So it would seem the only jobs that are left in the area are in government, law enforcement and small tourism, restaurant, grocery store etc jobs. All of the trimmigrants have been gone I don’t see as many of them around anymore and when they do come there are pretty pathetic lot because there’s no money to be had. Is anybody else thinking down the same lines or talking about this with their friends? We’re watching it all implode right now with our own eyes. And even you C.H.U.M.P. if you buy all the foreclosed properties what’s the point? There’s no value in them anymore the prices are dropping like rocks so what’s the point of owning it if it’s worth nothing?

Timber is way up. Most growers had to go through the same permitting process for a THP. Once they’re bankrupt (6-18 months) their properties will go up for auction for pennies on the dollar ready to log with permits on Hand. Great time to invest.

That’s what this permit scam was all about methinks…. punishing the hippy and murking all the trees 4 $$$$…. loggers/maxam strike back — I’m a logger but I ALREADY own land and don’t need to buy stuff cheap vs. being fair and forethright… My mom survived cancer with garden products.

When were garden stores slammmed in January? Most of these foreclosures etc are the direct result folks being irresponsible with their profits. These folks had plenty of money to go on exotic vacations yearly, buy new vehicles every year etc etc. Why couldnt they of payed off their mortgage? Let me guess, you still blame the mortgage companies for the mortgage crisis? All those smart folks taking no doc loans with an arm loan. Brilliant. Yeah, blame everyone else but yourselves.

How anyone with a brain didnt see the writing on the wall is beyond me. These folks are finding out about business budgets the hard way.

Yes garden stores were slammed in January. It is FEBRUARY lol! Often times people purchased their soils to allow them to soften a little in the rain. It is also the time that the trucks start bringing lots of bulk deliveries to the different various garden shops. Also previously there was a large indoor market that pretty much kept the garden shops busy year-round. Now the parking lots are empty. Sure they were irresponsible and thought they were going to do other things with it, they couldn’t see an end. Everyone pushed for “legalization” and this is where we wind up. Not saying it shouldn’t be or it should be but it definitely swept the rug out from underneath the whole canna cultures feet. And might I add very fast. The sups and tax man all have dollar signs in their eyes due to permits and programs. Now none of those programs are going to come to full fruition. The backlogged applications will never happen. A cluster F if ever there was one.

Alright, that all makes sense. Didnt think about the vast difference in indoor grows this past year or two. I especially agree with the second half of your statement also. Gonna be interesting times for sure. Good luck to all.

Truckers is another whole new topic, in Ca they are being hit with the new NOX regulations, having to buy new trucks soon the price of dirt will be more than the FLOWER. Just wondering maybe last year’s FLOWER could be used as compost to start a new batch…

Actually it hasn’t dropped yet…they are way above what the properties are worth still. It will be some time..everybody and their brother who has even bought a water board permit has doubled or tripled the asking price of their land. Owners feel as if they have a right to ask triple if they filled out an app, not to mention a pending app, or a permitted prop..The “land Man” hopped right on the bandwagon as a “Permitted Property Specialist” with listings in the millions for properties that are wirth 350k with 100k in greenhouse infrastructure and orchard style irrigation layouts. Dig a lil deeper and you will find most are just pending apps, and many are uncompleted apps. People are trying to get something for their lemons. The real estate agents are hustling hard, but not much is actually selling. It should drop down, but many a seller is stubborn as a donkey and believe in the gold at the end of the rainbow. Not willing to accept the reality that it’s just silver in your pocket for now. The market is shot. And we will see who really loves being a farmer…lol.

“And Fennel thinks, as things smooth out and small farmers know what the economy and the regulatory framework will really be like, they will submit applications under the county’s new permitting program. Now that the environmental lawsuit has been settled, and the Planning Commission has nearly finished their work, Fennel expects the County’s new application process to be open by summer if all goes well”
ha!
how is the county going to open up permits to new applicants when they can’t even process what they have i heard only 350 approved of over 3000 applied…no county permit no state permit…
approve these farmers or our county can not compete in the white market and or you will truly be dooming us!

Oh my and the state and counties Think they are going to make all this money off of their permitting processes and taxes. Good luck with that!
Pucker up! Change is a coming, fast and hard ready or NOT!

This is so revealing of exactly how out of touch Estelle really is….at least as far as her constituents are concerned.
The regulatory framework only 100 miles south works well, costs are realistic, no one is going crazy complaining….why not emulate Mendocino.
One of our local dirt store owners just killed himself…I lay that right at Estelles feet.

As far as no one is complaining in Mendocino yeah right!!! Just as backlogged, just as convoluted, just as out of touch as our northern neighbors. The sups meetings down here become quite a spectacular scene.
Major issue being the folks who make the rules are not cannabis farmers, do not depend on cannabis to earn a living, and walk a tight straight line of policy before practicality. And most (like 99%) of the folks running the program down in Mendocino actually don’t like cannabis at all.

They sold huge grow permits last year to production companies that had no contracts or plans to sell the product in the CA medical permit system. All that weed was moved out of state. The supervisors should be brought up on federal RICO charges. It was an obvious conspiracy to profit from the breaking of federal distribution laws. I hope Sessions gets here soon!!!

This is so true, they gave out huge permits to folks for multiple acres. These people had there permits green lighted, and pushed through faster than anyone else.

How come everyone is still waiting to get there permits approved and these other folks had there’s done beginning of the year.

There was not even a legal market or a track and trace setup for this product yet but the county supervisors went ahead and let huge company’s grow huge amounts of weed and they sold it all on the black market.

The County of Humboldt received some 1800 commercial cannabis applications OVER ONE YEAR AGO and less than 130 have been permitted with conditions. They have gone on record as saying that there are an estimated 600 completed applications. I guess the other 1200 are somewhere in limbo between the file room in the halls of County Planning and a 3rd party consultant in Berkeley or San Diego in perpetual administrative limbo.
And with some more than 300 Interim Permits issued, the County gets to start sending out illegal tax bills for collection to the tune of about 4.5 Million Dollars if based on a average of 15,000 sq ft of outdoor grow. (which is a very low average) These illegal tax bills are being sent to interim permit holders who are not yet approved to grow cannabis. Now that is wack!! And if not paid within 30 days, they are assessed a 25% penalty and additional 10% for every 30 days after that!

Just IMAGINE if they can get at least 1,000 more land use permits processed to bring in ANOTHER 15 Million Dollars to add to the County coffers – and pay back that CalPers debt. What?What? What the heck is the County doing NOT approving these local land use permits????
And hopefully when the bad debt gets paid back to the retirement funds of the County employees, maybe they can spend some money on road infrastructure and business programs to ensure our local farmer can maintain their businesses.

You know if more states would just make marijuana illegal the money would just miraculously show up for all the good farmers, businesses and tax collectors of Nor Cali. Darn it to hell anyway! Ha Ha Ha! Marijuana is a weed it is as hard to grow as a thistle in your vegetable garden,legalization will make that cash crop as worthless to a farmer as a thistle is to a vegetable gardener. Don’t let that county line hit you in the Keyster as you head out to sell your product on a more profitable drug turf With less freight charges.

Think of it this way, grapes are relatively easy to grow, but to make a fine wine it requires skill and is a true art form. Most people growing lose that quality due to not understanding the curing and storing process, thus creating a product closer to hay!

Fennel is out of touch. Vote Bud Rogers if you get another chance! What “lavish” spending? That is a myth, Most are barely getting by…And the small farmer is swallowed up by the corporate model (megagrows).Sad

Fennell has been helping many small farmers through the process. She and John Ford helped my family with the last bit to get our permit on our 8,000sq ft. We are doing well financially and are glad we did it, but we planned ahead for this. People knew this was coming and many didn’t plan ahead and now they’re hurting and trying to play “catch up”. The ones that did the work and planned for this day are doing well and you won’t hear them complaining.

It’s good to hear from someone in this industry who has some actual business sense. I know there are more of you out there and eventually, you will be doing very well, because a huge chunk of your competition is going to be culled due to the regulations. This is America.

They will be culled as well. False hopes for people right now. Wait till July and August and tell us how well you are doing. 8k sf and you think you can survive? Im on your side, just playing devils advocate.

This iis another classic case of ‘cult of Personality’. Yes, So Hum loves to drink the Kool-Aid, they voted for their long time KMUD news reporter because she was that calming dulcet voice everyone thought they could trust even though she had no political experience. These are the same people that elected the highly incompetent Paul Gallegos into the DA’s office because he wasn’t going to prosecute them for weed growing. When she is through with office I see a reality series, ‘Celebrity Weed Apprentice’. Sound familiar.
Don’t blame me I voted for Bud Rogers.

She was great as KMUD news director! Great asset to the community. I really appreciated her professionalism and attention to her duty as a journalist. I would not take away from her accomplishments there….. And yeah- she is a terrible supervisor.

i love how after buying payin for your land , you must pay property tax, then on top of that a land use tax on top of permit fees app fees doc fees, my god , this must be what our founding fathers were thinking about back in the day. just wait till someone figures out how to charge a air tax. we will all be paying for permission to breath.

“But a real take away from this is that it’s proof that the Cannabis industry plays a role in Humboldt’s economy.” ARE YOU KIDDING ME? What a dumb statement. Is she just realizing this, or do we need to see everyone go fucking broke before they say, “I guess Humboldt thrived on weed money.” And the sky is blue. She is such a pandering fake.

It’s 100% bullshit that she claims she can’t comment on Measure S because there “might be legal action”. It is BECAUSE people are upset enough that somebody MIGHT sue that she, as a County Representative, is OBLIGED to tell her salary payers what her thoughts are on the subject. They pulled a fast one and they know it.

Once large corporations work out how to profit from marihuana, the industry will move to major agricultural areas.. No real ag business is going to have any interest in miles of dirt road or hillside cultivation.. The County is making what will be a one time grab for permit and tax money as the industry moves away.. CoOps are the only possiblity in the legal market.. How will the County treat permitted properties which cannot make their tax bill.? It looks to me like permits are going to be suicidal as far as property ownership is concerned.. Logging smaller parcels is not financially profitable due to THP expenses.. The price of fir is actually down.. The trucks on the road are hauling redwood.. Corporate growers will quickly learn how to grow excellent pot.. The Humboldt brand will slowly fade and be replaced by brands like Salinas or Arbuckle.. The only bright light will be that the housing shortage will disappear..

And so their friends on the state board will adjust the pesticide requirements. That stuff (the particular chemical contaminants and their ppm concentrations) are all arbitrary anyways with zero actual lab tests backing up data on danger to humans by smoking. They will adjust and accommodate. Sorry to sound like a downer but that is how business and business-dominated state boards operate in a BigAg state.
I’m sorry but the only real fix is a huge petition campaign to get another proposition on the state ballot that rewrites or even strips away the fake “legalization” that was passed. It’s very difficult but not impossible and would really kick the corporations’ asses. Reset everything and start over. That is what we should be discussing- not how to fine-tune the piano on the sinking Titanic.

What makes you think “big industrial grows” are going to get heavily involved in cannabis when they can’t sell the product outside the state? The black market will continue to thrive because there are only 9 states where it’s legal both recreationally and medically. Twenty-one states have no legalization, and rest are medical only. There’s a massive consumer base in this country. Most regions in this country can’t really grow a good product, too humid, too cold, not enough sun, or a variation of all. Sorry to disappoint you but people are driving by Salinas to come up to Meno and Humboldt, and people coming from out of state don’t stop down south. The Humboldt brand will endure as long as the weed maintains it’s quality.

19 parcels /homesteads on the MLS in salmon creek ALONE. Countless others up elk Creek cathey road nor hum ettrsburg & honeydew. Some are regular homesteads, some permitted or in process, one even u offers to leave “staff.” Another guarantees return on investment (over 1mil) in a single year!!

Many, many on the mkt over 300 days. And most are way over priced. Few sales are actually happening. Values are skewed and dropping. i have first hand information that some listed parcels have been looked at zero times by potential buyers . No interest.

And if growing legal is so great why is there such a rush to sell? Oh it must not be. Or the pipe dreams misled many.

And one other question I ponder is why were obvious blow it up grow scenes actually given preferential treatment in the permitting process? +growers had to validate that u had X amount under cultivation to apply for that level + And now are possibly going to reap further bene’s offloading their grown scene property for 10x’s investment? That seems unfair. And a culture of rogue outlaws is now suddenly going to dot I’s and cross T’s?

Maybe the law abiding ones who could prove they NEVER GREW should have been first in line for permits and hyper inflation of their real estate.

I agree 100%. U r spot on. The time to sell land was BEFORE legalization. People trying to unload for top dollar missed the boat. It was BUY THE RUMOR & SELL THE NEWS! People are not buying land now. Watch as property values drop & weed gets even harder to sell we will see lots of property go back to their rightful owners. This could be good for those that are actually raising families in Humboldt & not here just to grow weed. The collapsing marijuana market might be the best thing that has happened 👍👊💎😀😎

I spent my recent recovery time doing a deep real estate investigation and the news is dramatic .

The Feb 2018 real estate guide has 38 +- parcels with “permits on file” or “permits in hand.” I counted. And just a single such parcel is listed as recently “sold .” One. There is so much red ink as prices on everything are slashed by 100k at a wack.. 100k reductions . Not 10.

Craigslist has another dozen or so permitted or permit in process FSBO hugeass grows. At huge wallet prices.

What is also very enlightening is a Zillow search. You can view not only properties for sale in a particular area, how long on the mkt (and if listed removed and relisted,) but also u can see sales in like the last 3 years ! And opening the tax info drop down tells you the purchase prices through the past/current owners.

For example Big Grow Property up any nameless neighborhood purchased at big ticket only 2yr ago has an apprx 6k (!!) annual property tax. That’s on top of the mortgage and any cannabis fees taxes etc.

According to an appraiser for Northern Mendocino and Southern Hunboldt housing prices are going to tank after Spring. Businesses that have been around for decades are now selling. People who came here to retire are selling and leaving. There was very little tourism last year. Instead we get hundreds of strangers, a lot with baggage, inundating our neighborhoods. No consideration was given to the constitute, people who dedicated their lives to this region. The burden was forced on US!!!
Appalling to hear from an individual elected to serve the people come up with such bullshit. Really did we elect her to sell us down the river!? I hope she gets criminally prosecuted! Estelle”s actions and decisions was never genuine or made in our best interest!

I work in town. I must need new eye glasses cause I saw tourists all yr long last yr.
But then maybe its not my glasses cause I met some really nice folks who came thru last yr. Are u speaking from experience or repeating what you heard. Last I heard, that’s called gossip.

You are right about your appraiser friend informing you values will tank. Because appraisers work by legally regulated and stringent guidelines which are required by law to reflect reality .

The property values are determined by sales of “comps” (a comparable parcel/home in size/age in similar or same neighborhood) in the last 3 months. Not by what the owner invested or believes it’s worth. Sad but true.

As prices hit the gutter, and sales slow, people get desperate and sell at a loss to get out. Hense further depressing values and it becomes a self perpetuating cycle.

People don’t understand that the appraiser can’t just pull some number out of his a**. Remember the housing bubble/crisis?? Appraisers and lenders got in big trouble for just making s*** up.

WHICH is another reason you NEVER pay what your vacating land partner /ex-spouse, or that property owner, or realtor tries to tell u a particular house or parcel is worth. ONLY an appraiser can give u a real time assessment of the true value in the market @ this time.

“Fennel emphasized the name recognition Humboldt has in the marijuana world”, in the black market world, this statement is 100% correct. However in the new industry, nobody gives a horse turd where it came from. No more does the word Humboldt mean anything.